| 14 December 2009

Charles Schwab (SCHW) reported monthly metrics for November this morning. Despite the fact that the firm added $6 billion in new assets, increasing its total assets by 26% over year-ago figures, the company lowered guidance for the fourth quarter by $0.02 to $0.04.. 

DARTs decreased 10% versus last month -- in line with what we've seen from other brokers. We reported last week that optionsXpress (OXPS) trading activity was down 15% in November. Total accounts were flat for the month at Schwab, ending at 7.66 million accounts.

Schwab's CFO, Joe Martinetto, gives us great insight into the string of pressures on brokers, and of course on Schwab in particular: "continued declines in the rate environment have led to heightened revenue pressures during the fourth quarter – we currently believe that management fee waivers on our proprietary money market mutual funds could increase by approximately $30 million over the third quarter total of $78 million – and client trading volumes have slowed in recent weeks. These factors, coupled with our normal seasonal increase in marketing investment, lead us to expect that fourth quarter earnings per share will be $0.02 to $0.04 lower than our third quarter 2009 results.

Martinetto said that in addition to a strong market and economy, look for things to improve at Schwab, "as soon as interest rates stabilize.”

Looks like Q4 continues to be a rough one for brokers. We expect to hear from TD Ameritrade (AMTD) in a few days.